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Albertsons Companies, Inc. (ACI)
:ACI
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Albertsons Companies (ACI) AI Stock Analysis

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ACI

Albertsons Companies

(NYSE:ACI)

Rating:61Neutral
Price Target:
$21.50
▲(3.37%Upside)
Albertsons Companies' overall stock score is influenced by steady financial performance and attractive valuation metrics despite facing profitability challenges. Technical analysis points to bearish momentum, while earnings call insights provide a mixed outlook with strong digital growth but profitability hurdles. The company’s focus on strategic investments and shareholder returns adds a positive note to the overall assessment.
Positive Factors
Investments and Growth
ACI's investments and productivity initiatives are expected to begin driving higher growth and cost savings.
Valuation and Market Perception
ACI may see valuation expansion as investors seek inexpensive, defensive stocks, with an attractive risk/reward given low earnings expectations.
Negative Factors
Margin Pressure
Margin pressure is expected to continue due to investments in pharmacy, digital, wages, and customer experience.
Market Share and Competition
Market share spread to KR is widening, as ACI lost ~185 bps of share in Q1'25 compared to KR's gain of ~64 bps.

Albertsons Companies (ACI) vs. SPDR S&P 500 ETF (SPY)

Albertsons Companies Business Overview & Revenue Model

Company DescriptionAlbertsons Companies, Inc. (ACI) is one of the largest food and drug retailers in the United States. The company operates across multiple sectors, primarily focusing on retail grocery and pharmacy services. Through its various well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, and several others, the company offers a wide range of products such as groceries, fresh produce, and pharmacy services to its customers. With a strong presence in the retail sector, Albertsons Companies serves millions of customers across numerous store locations nationwide.
How the Company Makes MoneyAlbertsons Companies generates revenue through several key streams, primarily from the sale of groceries and pharmacy products. Its core revenue model is based on retail operations, where the company sells a wide array of products, including fresh produce, packaged foods, beverages, household goods, and health and beauty items. In addition to grocery sales, the company earns significant revenue from its in-store pharmacy services, which include prescription dispensing and health consultations. Albertsons also engages in strategic partnerships and loyalty programs, enhancing customer engagement and sales. The company's revenue model is supported by its extensive network of stores, robust supply chain, and strong brand recognition across its multiple banners.

Albertsons Companies Earnings Call Summary

Earnings Call Date:Jul 15, 2025
(Q1-2025)
|
% Change Since: -6.01%|
Next Earnings Date:Oct 21, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong focus on digital growth, strategic investments, and shareholder returns, indicating positive momentum in key areas. However, challenges like gross margin decline, lower EPS, and ongoing labor negotiations present hurdles. The balance between positive digital and strategic growth against financial and operational challenges results in a mixed outlook.
Q1-2025 Updates
Positive Updates
Digital Platform Growth
E-commerce grew 25% and reached 9% of total grocery revenue. Loyalty program grew 14% to 47 million members. Pharmacy and health platform grew 20% year over year.
Strategic Investments and Initiatives
Investments in customer value proposition, digital growth, media collective, and health and pharmacy are expected to drive growth. The company plans to deliver $1.5 billion in savings through their productivity engine from 2025 to 2027.
Capital Allocation and Shareholder Returns
Invested $585 million in capital expenditures and returned $401 million to shareholders, including dividends and share repurchases.
Positive Financial Performance
Identical sales growth of 2.8%, driven by 20% growth in pharmacy and a 25% increase in digital sales.
Negative Updates
Gross Margin Decline
Gross margin rate decreased by 85 basis points compared to last year, due to investments in customer value proposition and a mix shift impact from strong growth in pharmacy and digital businesses.
Adjusted EPS Decline
Adjusted EPS was $0.55 per diluted share, down from $0.66 per diluted share last year.
Challenges in Labor Negotiations
Negotiations covering approximately 120,000 associates with agreements reached for only half, causing potential operational challenges.
Company Guidance
During the Albertsons Companies, Inc. first quarter 2025 earnings call, the company provided guidance for fiscal 2025, highlighting several key metrics and strategic priorities. Identical sales growth was reported at 2.8%, with significant contributions from a 25% increase in digital sales and 20% growth in the pharmacy sector. Adjusted EBITDA for the quarter was $1.11 billion, and adjusted earnings per share stood at $0.55. The company expects identical sales growth for the full fiscal year to be in the range of 2% to 2.75%. Despite the strong sales growth, profitability challenges persist due to investments in the customer value proposition and the mix shift toward digital and pharmacy businesses, leading to a gross margin rate of 27.1%, a decrease of 85 basis points from the previous year. Albertsons plans to address these challenges through a productivity agenda aimed at delivering $1.5 billion in savings from 2025 to 2027, which will be reinvested into growth and offset inflationary pressures. Capital expenditures are projected to range between $1.7 billion and $1.9 billion, with a continued focus on digital and technological modernization. The company maintains its adjusted EBITDA guidance of $3.8 billion to $3.9 billion for fiscal 2025 and anticipates adjusted EPS to be between $2.30 and $2.16.

Albertsons Companies Financial Statement Overview

Summary
Albertsons Companies demonstrates steady revenue growth and sound cash generation capabilities despite facing profitability challenges. The company's balance sheet reflects high leverage but shows signs of stabilization. Continued focus on improving operational efficiency and managing debt levels will be crucial for sustaining growth and enhancing shareholder value.
Income Statement
65
Positive
Albertsons shows a stable revenue growth with recent TTM revenue at $81.01 billion compared to $80.39 billion in the previous year, indicating a modest growth trajectory. However, net income has slightly declined, resulting in a net profit margin decrease. The gross profit margin remains healthy, but the decline in EBIT and EBITDA margins suggests rising operational costs affecting profitability.
Balance Sheet
58
Neutral
The company maintains a high debt-to-equity ratio, reflecting significant leverage at a level typical for the grocery industry. Despite this, the equity ratio shows slight improvement, indicating some strengthening of financial stability. Return on equity has decreased due to lower net income, signaling challenges in generating returns for shareholders.
Cash Flow
70
Positive
Albertsons maintains a positive free cash flow, though it has decreased compared to previous periods. The operating cash flow to net income ratio signifies efficient cash generation relative to net income. However, the declining free cash flow growth rate suggests potential pressures on future cash availability for investments and debt servicing.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue80.39B79.24B77.65B71.89B69.69B
Gross Profit22.26B22.05B21.76B20.72B20.41B
EBITDA4.08B4.53B4.85B4.87B3.78B
Net Income958.60M1.30B1.51B1.62B850.20M
Balance Sheet
Total Assets26.76B26.22B26.17B28.12B26.60B
Cash, Cash Equivalents and Short-Term Investments293.60M188.70M455.80M2.90B1.72B
Total Debt14.18B14.24B14.96B14.03B14.47B
Total Liabilities23.37B23.47B24.56B25.10B25.27B
Stockholders Equity3.39B2.75B1.61B3.02B1.32B
Cash Flow
Free Cash Flow749.40M628.20M700.00M1.91B2.27B
Operating Cash Flow2.68B2.66B2.85B3.51B3.90B
Investing Cash Flow-1.89B-1.75B-1.98B-1.54B-1.57B
Financing Cash Flow-684.10M-1.18B-3.37B-789.50M-1.04B

Albertsons Companies Technical Analysis

Technical Analysis Sentiment
Negative
Last Price20.80
Price Trends
50DMA
21.56
Negative
100DMA
21.52
Negative
200DMA
20.38
Positive
Market Momentum
MACD
-0.32
Positive
RSI
41.48
Neutral
STOCH
25.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACI, the sentiment is Negative. The current price of 20.8 is below the 20-day moving average (MA) of 21.37, below the 50-day MA of 21.56, and above the 200-day MA of 20.38, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 41.48 is Neutral, neither overbought nor oversold. The STOCH value of 25.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACI.

Albertsons Companies Risk Analysis

Albertsons Companies disclosed 43 risk factors in its most recent earnings report. Albertsons Companies reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Albertsons Companies Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$16.09B37.0135.74%15.51%53.77%
73
Outperform
$48.19B19.8124.06%1.77%-2.11%25.03%
69
Neutral
$2.07B19.327.54%1.77%1.76%6.01%
65
Neutral
$27.20B15.73-4.29%2.57%1.03%4.90%
65
Neutral
$1.23B20.714.00%1.00%-7.79%-64.85%
61
Neutral
$11.64B12.6831.10%2.78%1.96%-14.99%
58
Neutral
$1.37B83.081.43%10.37%-73.84%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ACI
Albertsons Companies
20.54
0.51
2.55%
IMKTA
Ingles Markets
66.33
-12.58
-15.94%
KR
Kroger Company
72.38
19.25
36.23%
WMK
Weis Markets
77.22
3.64
4.95%
SFM
Sprouts Farmers
164.40
77.70
89.62%
GO
Grocery Outlet Holding
13.99
-6.81
-32.74%

Albertsons Companies Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Albertsons Companies Announces CEO Vivek Sankaran’s Retirement
Neutral
Mar 3, 2025

Albertsons Companies announced the retirement of CEO Vivek Sankaran, effective May 1, 2025, with Susan Morris, the current Executive Vice President and Chief Operations Officer, set to succeed him. This transition is part of a comprehensive succession plan, with Morris bringing nearly 40 years of industry experience to the role, aiming to continue the company’s growth and strategic initiatives, including the ‘Customers for Life’ strategy.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 20, 2025